Changing Jobs
Life events

Are you changing jobs?

Starting a new phase of your career may involve the full gamut of emotions. Whether it’s welcome or not, this life event usually involves decisions about a number of financial matters, such as management of your severance pay, management of your accumulated pension fund and the benefits offered by your new employer.

SEVERANCE PAY

If you have received severance pay, be sure to use it wisely. You can use this amount to:
- pay all or a portion of your debts;
- save for the future by making a direct transfer to your RRSP (tax-free);
- obtain regular income to pay your living expenses;
- create an emergency fund for unexpected expenses (three to six months of living expenses); or
- generate income by putting the amount into interest-bearing investments.

PENSION PLAN

If you have built up a pension plan, you may choose to:
- withdraw the accumulated amount now;
- transfer the present value of the pension to a LIRA or an RRSP; or
- leave the accumulated amount in the plan and begin making withdrawals when you retire.- this decision is very important, and you must take into account the pension’s implicit minimum rate of return.